Identifier
Created
Classification
Origin
07ABIDJAN14
2007-01-05 16:39:00
UNCLASSIFIED
Embassy Abidjan
Cable title:  

COTE D'IVOIRE 2007 INVESTMENT CLIMATE STATEMENT

Tags:  OPIC USTR KTDB ECON ETRD 
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RR RUEHMA RUEHPA
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ZNR UUUUU ZZH
R 051639Z JAN 07
FM AMEMBASSY ABIDJAN
TO RUEATRS/DEPT OF TREASURY WASHDC
RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/USDOC WASHDC
RUEHC/SECSTATE WASHDC 2402
INFO RUEHZK/ECOWAS COLLECTIVE
UNCLAS SECTION 01 OF 08 ABIDJAN 000014 

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STATE FOR EB/IFD/OIA

E.O. 12958: N/A
TAGS: OPIC USTR KTDB ECON ETRD
SUBJECT: COTE D'IVOIRE 2007 INVESTMENT CLIMATE STATEMENT

UNCLAS SECTION 01 OF 08 ABIDJAN 000014

SIPDIS

SIPDIS

STATE FOR EB/IFD/OIA

E.O. 12958: N/A
TAGS: OPIC USTR KTDB ECON ETRD
SUBJECT: COTE D'IVOIRE 2007 INVESTMENT CLIMATE STATEMENT


1. Summary: Cote d,Ivoire,s economy is projected to
increase by 2 percent in 2007, slightly higher than 1.8
percent in 2006. The main contributors of the growth are
higher export earnings from oil and refined products, cocoa
revenues and proceeds from the telecommunications sector.
Despite these growth prospects, the environment for business
and investment in Cote d,Ivoire is still hampered by the
lack of progress in the peace process. In November 2004, the
World Bank declared CI in non-accrual status, and halted its
few remaining projects in country; until the arrears with the
Bank are cleared, all World Bank and IMF projects will remain
frozen, including vital support for the implementation of the
Disarmament, Demobilization and Reinsertion (DDR) program
associated with the peace process. The GOCI has also fallen
behind in paying premiums to the police and military and
recurring administrative expenses. However, thus far, thanks
to a steady world price for its main export crop, cocoa, and
earnings from oil exploration leases, the government has
managed to pay basic salaries each month and basic operating
expenses. To support business recovery, the GOCI has
introduced new fiscal measures including the reduction of
corporate income tax and tax exemptions for companies that
left the country as a result of the crisis. The government
has also made institutional changes in the public bidding
process. Nonetheless, the steps towards an enabling business
environment in Cote d,Ivoire are interlinked with the peace
process momentum, which encompasses DDR, the civil
identification process and the return of the civil
administration that are key to the holding of elections.


2. OPENNESS TO FOREIGN INVESTMENT: Despite the ongoing
political/economic crisis, the Ivoirian government actively
encourages foreign investment through mergers, acquisitions,
joint ventures, takeovers, or startups. There are no
significant limits on foreign investment nor are there
generally differences in treatment of foreign and national
investors, either in terms of the level of foreign ownership
or sector of investment. The government does not screen

investments and has no overall economic and industrial
strategy that discriminates against foreign-owned firms. The
investment code was designed to boost private sector
investment and increase national production. The code
includes incentives, such as tax breaks, for larger
investments and for investments outside of Abidjan and other
urban industrial areas. There is also a Petroleum Investment
Code and a Mining Investment Code, which were revised to
encourage foreign investment in these sectors by making
investments in them eligible for exemption from income tax
and other taxes, and exemption from the value added tax on
equipment, materials and the first consignment of spare
parts, except when there are equivalent products either made
in Cote d'Ivoire or available in country at similar cost.


3. As part of the 2006 new tax schedule, the GOCI
introduced, on August 26, 2006, fiscal measures to reduce
company tax burden and stimulate economic activity. These
measures include: The reduction of the corporate income tax
from 35 to 27 percent, effective December 31, 2006, and the
awarding of three-year corporate income tax exemption and
free tax registration for the relocation of companies that
left the country as a result of the crisis. Cote d'Ivoire
has an investment promotion center called CEPICI, (Centre des
Promotion des Investissesments en Cote d,Ivoire located at
www.cepci.net),which provides investment information and
assistance for entrepreneurs interested in starting a
business or foreign enterprises interested in investing in
Cote d'Ivoire. CEPICI provides a "one-stop-shop" for
investors, an outreach program to match opportunities with
potential investors, and a public-private liaison program.
CEPICI also maintains a file of projects seeking foreign
investment.


4. Foreign companies are free to invest and list on the
regional stock exchange (BRVM),which is based in Abidjan and
is dominated by Ivoirian and French companies. With the
inception of the regional exchange, the West African Economic
and Monetary Union (WAEMU) members established the Regional
Council for Savings and Investment, a regional securities
regulatory body. In past privatizations, such as for
management of the Port of Abidjan and for management of the
electric and water companies, well-entrenched French
companies won, which led to allegations of corruption on the
part of losing investors. Bids are not always made public,
the government sometimes simply chooses from among companies
that have proactively contacted it about an investment
opportunity rather than proceeding through a public bid
process.


ABIDJAN 00000014 002 OF 008



5. The government does not use tax, labor, environment, or
health and safety laws to impede or distort investment.
Well-entrenched companies historically have formed
relationships with GOCI officials, which frequently influence
the awarding of tenders. There is no sector where American
investors have been formally refused the same treatment as
other foreign investors. There are some limitations on
foreign investment worth noting. As a means to monitor
foreign exchange flows, for example, the external finance and
credit office of the Finance Ministry must approve
investments from outside the West African Franc (FCFA) zone.
Despite regulations designed to control land speculation, in
urban areas, foreigners own significant amounts of land in
Cote d'Ivoire. Free-hold tenure outside of urban areas,
despite land reform, is difficult and most businesses opt for
long-term leases.


6. There are sizable U.S. investments in offshore gas and
oil exploration and production, petroleum product
distribution, cocoa and coffee processing and shipping, and
banking. The petroleum sector will continue to grow in 2007.
There is a need for oil-servicing companies, oil exploration
equipment and for experienced ex-patriot engineers and rig
managers. The oil and gas sector has particularly grown,
supported by the development of new oil fields, a rising
production and higher oil prices. Oil has become Cote
d,Ivoire,s leading export product ranking cocoa at the
second place. Another area of commercial success is cellular
phone service, which has seen the entry of a third mobile
operator and a fourth is due to start operation soon; each
company is largely financed by foreign capital.


7. The cocoa sector still remains significant to the
economy. It contributes up to 40 percent of export revenues
and 20 percent of government fiscal revenues. Because of this
sector's critical importance to the Ivoirian economy, the
government has expressed concern that foreign companies not
dominate it. Although the government has liberalized the
market, it limits the amount of cocoa that large foreign
exporters can purchase and process to approximately 23% of
the total harvest. The Ivoirian government has also
established several private and public control agencies to
regulate the industry. After two years of disruptive strikes,
in the fall of 2004, the Ivoirian President established a
"Blue Ribbon Commission" to review the coffee and cocoa
sectors and recommend accelerated reforms. The commission's
report, which was provided in May 2005, has not yet been made
public. The World Bank and IMF have focused on the cocoa
sector as a key economic bellweather and will likely insist
that the Ivoirian government commit to a package of specific
reforms in this sector if these institutions restart programs
in Cote d'Ivoire.


8. CONVERSION AND TRANSFER POLICIES: Cote d'Ivoire is a
member of the West African Economic and Monetary Union
(WAEMU),which uses the Franc CFA (FCFA),a convertible
currency. The French Central Bank continues to hold the
international reserves of WAMEU member states and maintains a
fixed rate of 655.956 CFA to the Euro. The WAEMU has unified
foreign exchange regulations. Under these regulations, there
are no restrictions for transfers within the community and
designated commercial banks are able to approve routine
foreign exchange transactions inside the community. The
transfer abroad of the proceeds of liquidation of foreign
direct investments no longer requires prior government
approval. Despite the ability to freely transfer funds
within the WAEMU zone, when Ivoirians and expatriate
residents are traveling from Cote d'Ivoire to another WAEMU
country, they must declare the amount of currency being
carried out of the country. When traveling from Cote d'Ivoire
to a destination other than another WAEMU country, Ivoirians
and expatriate residents are prohibited from carrying an
amount of currency greater than equivalent of two million CFA
francs (approximately $4,000). Larger amounts of require the
approval of the Ministry of Finance, and must be in travelers
or bank checks.


9. The Government must grant prior permission for
investments coming into the WAEMU zone from outside and
routinely does so. Once an investment is established and
documented, the Government regularly approves remittances of
dividends and/or repatriation of capital. The same holds true
for requests for other sorts of transactions -- e.g.,
imports, licenses, and royalty fees. Multi-national firms in
Cote d,Ivoire have complained that temporary liquidity
shortfalls sometimes occur in the banking system. These
problems are particularly of concern during the main cocoa
harvest when companies are trying to transfer large sums of

ABIDJAN 00000014 003 OF 008


money in and out as cocoa is purchased and exported.
Companies continue to complain that the Government is slow in
approving currency conversions.


10. EXPROPRIATION AND COMPENSATION: Cote d'Ivoire's public
expropriation law includes compensation provisions similar to
those in the United States. Historically, expropriation has
not been an issue in Cote d'Ivoire and the Embassy is not
aware of any cases of government expropriation of private
property. Private expropriation as a means to force
settlement of contractual or investment disputes has
continued to be a problem, particularly for American
investors in recent years. Investors should be aware that
local individuals or local companies using what appear to be
spurious court decisions have challenged the ownership of
some foreign companies in recent years. On occasion the
Government has blocked the bank accounts of U.S. and other
foreign companies because of ownership and tax disputes.
Corruption in the judicial system and security services has
resulted in poor enforcement of private property rights,
particularly when the expropriated entity is foreign held and
the expropriator is Ivoirian or is a long-term French or
Lebanese resident.


11. DISPUTE SETTLEMENT: The judicial system is
dysfunctional and in need of reform. Enforcement of contract
rights is often time-consuming and expensive as court cases
move slowly. Judges sometimes fail to base their decisions on
the legal or contractual merits of the case and tend to rule
against foreign investors in favor of entrenched interests.
In addition, cases are often endlessly postponed and appealed
again and again, moving from court to court, in some cases
for decades. It is widely believed that magistrates are
sometimes subject to political or financial influence. Some
investors stipulate in contracts that disputes must be
settled in the international commercial arbitration court in
Paris or the Hague. However, even if stipulated in the
contract, international or regional arbitration decisions are
sometimes not honored by local courts.


12. Given that the average time from filing to resolution of
a contract dispute is eight years, in 1999, the Government
established an arbitration tribunal for businesses to settle
commercial disputes without going to court. The arbitration
court is supposed to provide alternative modes of conflict
resolution including arbitration, conciliation, mediation and
expertise. In July 2004, the business community welcomed
revision of the Board to include participation of local
chambers of commerce. The business community was also pleased
at the Board,s ability to more quickly enforce awards.
However, use of the Board, in lieu of the court system has
been limited: in the past six years, the Arbitration Board
has heard only 55 cases (10 in 2006). In adition to its
local arbitration board, Cote d'Ivire is a member of the
International Center for he Settlement of Investment
Disputes. There is alo the Abidjan-based Joint Court of
Justice and Abitration as an alternative means of solving
conractual disputes.

13. There is political consenus on the need to reform the
judicial system. Hoever, in 2006, the Ivoirian government
remained peoccupied with the ongoing political crisis and
any other legislative initiatives, including judical
reform, remained on the back burner. Reform eforts are
likely to continue to languish until ater the next
presidential elections, currently scheduled to take place by
October 2007. Under the pending reform plans, the GOCI would
dismantle the Supreme Court, and divide its authority among
several independent institution. The current Judicial
Chamber of the Supreme Court would become the High Appeals
Court (Cour de Cssation). It would handle civil, penal,
social, nd labor cases when it deems that a lower court di
not adequately apply the law. The current Adminstrative
Chamber of the Supreme Court would become the Council of
State (Conseil d'Etat),which would hear cases involving the
State or public authorities or cases against the Government.
The current Account Chamber of the Supreme Court will become
a separate and independent Account Court (Cour de Comptes),
examining the accounts of the State and of local government,
and hearing financial cases.


14. Further reform plans call for deciding more cases by
three-judge panels, instead of by a single judge; publishing
decisions more quickly; enhancing computerization in the
court system; training judges in commercial law; and
increasing the number of appeals courts to reduce the backlog
of commercial cases. Cote d'Ivoire has both commercial and
bankruptcy laws that address liquidation of business
liabilities. The Uniform Acts for the Organization and

ABIDJAN 00000014 004 OF 008


Harmonization of Business Law (OHADA) is a collection of
uniform laws on bankruptcy, debt collections, and the rules
governing business transactions. The OHADA permits three
different types of bankruptcy liquidation: an ordered
suspension of payment to permit a negotiated settlement, an
ordered suspension of payment to permit restructuring of the
company, similar to Chapter 11, and the complete liquidation
of assets, similar to Chapter 7. Creditors' rights,
irrespective of nationality, are protected equally by the
Act. Monetary judgments devolving from a bankruptcy are
usually paid out in local currency.


15. PERFORMANCE REQUIREMENTS AND INCENTIVES: Cote d'Ivoire
does not maintain any regulations inconsistent with WTO
Trade-Related Investment Measures (TRIMS). There are no
general performance requirements applied to investments, nor
does the Government or the investment authority generally
place conditions on location, local content, equity
ownership, import substitution, export requirements, host
country employment, technology transfer, or local financing.
Cellular telephone operating companies must meet technology
and performance requirements to maintain their licenses. The
Investment Code, the Petroleum Code, and the Mining Code
define the incentives available to new investors in Cote
d'Ivoire (see section A.1. above).


16. RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT: Foreign
investors generally have access to all forms of remunerative
activity on terms equal to the terms enjoyed by Ivoirians.
The government encourages foreign investment in the
privatization of state-owned and parastatal firms, though in
most cases the state reserves an equity stake in the new
company. Under its previous IMF Poverty Reduction and Growth
Facility, the government committed to privatizing 30
parastatal enterprises by the end of 2003. While some
privatizations occurred, the government has yet to sell the
majority of its shares in a major local bank, a cotton
company, and sugar company, and its remaining shares in the
telecommunications company. Plans to complete these
privatizations are likely to remain on hold until after the
2006 elections. In January 2005, the Council of Ministers
approved measures to liberalize the telecommunications
sector, which had been postponed since February 2004. The
legislation remains blocked in the National Assembly,
however, and it is unlikely to be passed into law before the
end of 2006. For the time being, the Ivoirian regulatory
agency continues to function under the authority granted to
it by the 1995 telecommunications code. The new rules will
end France Telecom's fixed-line monopoly through its
subsidiary, Cote d'Ivoire Telecom. A new regulatory agency
would also be created to manage the fully competitive market.


17. Banks and insurance companies are subject to licensing
requirements, but there are no restrictions aimed at limiting
foreign ownership or the establishment of subsidiaries of
foreign companies in this sector. There are no restrictions
on foreign investment in computer services, or education and
training services. However, there are restrictions on foreign
investment in the health sector, law and accounting firms,
and travel agencies. Investments in these sectors are subject
to prior approval, require association with an Ivoirian
partner (s),and appropriate licenses. Foreign companies
operate successfully in all these service sectors.


18. PROTECTION OF PROPERTY RIGHTS: The Ivoirian Civil Code
protects the acquisition and disposition of intellectual
property rights. Legal protection for intellectual property
may fall short of TRIPS standards due to uneven law
enforcement and the lack of custom checks in porous borders,
which do not allow law enforcement action on trade of
counterfeit products in the textile, pharmaceutical and
vehicle parts areas. Cote d'Ivoire is a party to the Paris
Convention, its 1958 revision, and the 1977 Bangui Agreement
covering 16 Francophone African countries in the African
Intellectual Property Organization (OAPI),which has been
TRIPS compliant since 2002. Under OAPI, rights registered in
one member country are valid for other member states. Patents
are valid for ten years, with the possibility of two
five-year extensions. Trademarks are valid for ten years and
are renewable indefinitely. Copyrights are valid for 50
years. In 2001, Ivorian experts drafted a new law in an
effort to bring Cote d,Ivoire into conformity with TRIPS.
The new law adds specific protection for computer programs,
databases, and extension of author,s rights with regard to
rented films and videos. However, the National Assembly has
not yet approved this legislation and will not likely take
action by the end of the year.


ABIDJAN 00000014 005 OF 008



19. The government's Office of Industrial Property is
charged with ensuring the protection of patents, trademarks,
industrial designs, and commercial names. The office faces
many challenges, including insufficient resources political
will and the distraction of the ongoing political crisis. As
a result, enforcement of IPR is largely ineffective. Foreign
companies, especially from East and South Asia, flood the
Ivoirian market with all types of counterfeit goods.
Government efforts to combat piracy are modest. The Ivoirian
Office of Author's Rights (BURIDA),put into effect a new
sticker system in January 2004 to prevent counterfeiting and
protect audio, video, literary and artistic property rights
in music and computer programs. BURIDA's operations remain
hampered by a long-running dispute between the management and
the board over policy and leadership issues. To resolve the
crisis at BURIDA, on March 15, 2006 the Minister of Culture
took a ministerial bylaw to establish a temporary
administration and a commission to study and propose a global
reform of this organization. Despite these challenges, it
does help to promote IPR enforcement with lawyers and
magistrates. Outside of urban areas, private individuals or
entities usually cannot obtain freehold tenure because the
traditional property rights of villages and ethnic groups
prevent the land from being sold. In urban areas where land
is not held as a "tenancy in common" by a tribal or village
head but is considered to be owned individually, it can still
be difficult to obtain a free-hold deed to a property even
years after a closing. For that reason, most individuals and
business tend to sign long-term leases. Although the legal
system recognizes the right to contract for leaseholds in
both urban and rural areas, there is not a clear
understanding by traditional tribal land-owners of property
rights. This complicates the enforcement of property rights
in rural areas. In addition, because free-hold tenure by
individuals is not generally permitted in rural areas,
would-be borrowers often have difficulty using real estate as
collateral for loans. Even in urban settings, in general, the
mortgage market is not well developed. As part of the
legislative reforms mandated by the Linas-Marcoussis Peace
agreement, in July 2004 the National Assembly adopted
amendments to the law on rural-land ownership. This new law
provides very limited free-hold ownership for rural lands,
which had been traditionally held as a tenancy in common by
villages. Rights are only protected, however, if the owner
can document proof of ownership through an assignment deed or
purchase contract.


20. TRANSPARENCY OF REGULATORY SYSTEM: The Government has
taken some steps toward encouraging a more transparent and
competitive economic environment. In addition, the IMF, World
Bank, European Union, and other large donors have pushed the
Government to take further steps towards reforms by placing
conditions on future loans and grants. A centralized office
of public bids in the Finance Ministry was designed to ensure
compliance with international bidding practices by providing
a neutral body to make bidding decisions in a transparent and
objective fashion based on clear criteria. In 2005, the
Ministry of Finance introduced institutional changes in the
new public procurement code. They are: The decentralization
of operational functions to make ministerial departments,
local governments and other government structures accountable
for the management of public resources, the creation of
consultative public procurement commissions in charge of
examining extraordinary decisions, the reinforcement of
public procurement coordination through new regulations,
training, procedural controls and more open and transparent
communication with the interested public, the establishment
of an appeals mechanism, and the reinforcement of auditing in
the public procurement process.


21. In addition to the office of public bids, there is also
an Inspector General's office and regulatory bodies for the
liberalized electricity and telecommunications sectors.
Customs and other officials can be obstructive for all
businesses operating in Cote d,Ivoire. Several years ago,
under pressure from the Bretton Woods institutions, the GOCI
dissolved the cocoa and coffee marketing board and replaced
it with a supposedly more market-oriented system regulated by
several private and public institutions with producer,
industry, and government representation. The results of the
sector's liberalization are decidedly mixed. The new agencies
tasked with the control and regulation of the sector have
worked neither efficiently nor transparently and have become
the subject of controversy regarding their fiduciary
mismanagement. In the Fall of 2004, the President bowed to
pressure from the international community and the planters,
and created a steering committee to review the coffee and
cocoa sectors and recommend reforms. The Committee submitted

ABIDJAN 00000014 006 OF 008


its report to the President in 2005, but the results have not
been made public. The World Bank and IMF will likely include
reform of the cocoa sector as requirements for any future
lending.


22. The Finance Ministry has been known to change tax
regimes overnight via ministerial decree, rather than working
through the Council of Ministers and the National Assembly.
The government sometimes levies large tax bills, which
companies say have little basis in law or standard accounting
practices. It then negotiates a lower bill with the company.


23. EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT:
Cote d,Ivoire commercial banking sector is sound, despite
the closure of 50 bank branches in the Northern, Center and
Western zones. Due to the financial risk associated with
long-term loans because of the ongoing political/economic
crisis, banks have begun to limit funding to the private
sector, particularly for small and medium size enterprises.
Banks continue to offer short-term loans. Banks generally
make lending and investment decisions on business criteria.
Portfolio investment is emerging. Government and private bond
issuances are available for purchase by individuals or
companies. The Regional Council for Savings Investments and
regulates the WAEMU securities exchanges market. Government
policies generally encourage the free flow of capital. Aside
from restrictions previously listed, there are no private
sector or government efforts to restrict foreign investment,
participation, or control of local industry. Credit for
business expansion is difficult to obtain. The government
relinquished its interest in smaller banks and retains only a
small minority share in several large banks. At the end of
2005, total assets of the 17 banks and two credit
institutions were FCFA 2.0 trillion (about USD 4.0 billion),
an increase of 1.7 percent from 2005 figures. Ivoirian
accounting systems are well developed and approach
international norms. A WAEMU-wide accounting system, under
which all member countries follow the same accounting rules,
is firmly in place. The FCFA exchange rate is pegged to the
Euro at 655.957 FCFA to one Euro. As a consequence, the
FCFA/USD rate fluctuates freely with the Euro/USD rate.
There is no evidence of &cross shareholding8 and &stable
shareholders8 to restrict foreign investment through mergers
and acquisitions in Cote d,Ivoire.


24. POLITICAL VIOLENCE: Politically motivated
demonstrations and strikes by workers, unions in the
education, transport, banking and cocoa sectors have occurred
and could continue to be potential sources of civil
disturbance in 2007. None of these protests have been
directed against American or foreign businesses. The after
effects of the political violence in November 2004 are still
being felt. Many of the more than 9,000 foreign nationals who
fled have not returned, and many of the businesses that were
destroyed by street mobs have not reopened. The Ivoirian
government has not made good on its promise to compensate
victims of the violence. Businesses that remain are
installing additional security measures to protect their
property and staff.


25. CORRUPTION: Cote d'Ivoire signed the UN Anti-corruption
Convention on December 10, 2003 but has not yet ratified it.
The country is not a signatory to the OECD Convention on
Combating Bribery. There are domestic laws and regulations to
combat corruption but they are neither generally nor
effectively enforced. Penalties can range from incarceration
to payment of civil fines. State employees can be convicted
of either passive or active corruption or bribery in the
performance of their duties. The law also punishes state
employees who receive directly or indirectly benefit from
private or parastatal companies related to contracts, markets
or financial payment under their purview. Managers of
companies who are complicit in the corrupting act are treated
as accomplices. Racketeering by security and defense forces
is often denounced in the media and constantly receives wide
attention from the authorities and the population. In 2005,
security forces and police officials launched media
advertisements to stop corruption. The ads entitled "that,s
enough" focused on citizens as the corrupters. There was a
loud outcry from civil society and the ads were quickly
pulled off the air. Sporadic unrest in the country has led to
an increase in the number of police, military and gendarme
checkpoints on the roads, and consequently an increase in the
solicitation of bribes at these checkpoints. Transport
companies have been particularly hard hit. Trucks moving
cargo from the western agricultural belt to Abidjan and
between Abidjan and the rebel-controlled Northern region
range pay a total of $100 to $400 at the various checkpoints

ABIDJAN 00000014 007 OF 008


they must pass through, depending on the cargo. There are
several governmental entities in charge of fighting
corruption: the General Secretariat in charge of good
governance, which has been changed into the Secretary of
State to the Prime Minister for Good Governance, since the
cabinet reshuffle in September 2006 , the Board of State
General Inspectors, and the Finance Ministry's Inspector
General's Office. None have been effective in stamping out
this growing problem. Neither Transparency International, nor
any regional or local non-governmental "watchdog"
organization operates in Cote d'Ivoire.


26. Many U.S. companies view corruption as an obstacle to
investment in Cote d'Ivoire. Corruption has the greatest
impact on judicial proceedings, contract awards, customs, and
tax issues. It is common for judges to base their decisions
on financial influence. Corruption and the ongoing
political/economic crisis have affected the Ivoirian
government's ability to attract foreign investment.
Transparency International s 2006 &corruption perception
index8 has ranked Cote d,Ivoire 153rd of 163 countries.
Businesses have reported corruption at every level of the
civil service. Stamps, copies, and an official act to
register a birth, death, automobile, carry a supplemental
"commission." If the commission is refused, the application
is not processed. The size of the commission varies with the
cost of the service or investment. Some U.S. investors have
raised specific concerns about the rule of law and the
government's ability to provide equal protection under the
law. A poor record in enforcing the rule of law was one
reason cited for the country's loss of eligibility for
benefits under the African Growth and Opportunity Act (AGOA)
at the end of 2004.


27. BILATERAL INVESTMENT AGREEMENTS: There are no bilateral
investment or taxation treaties between Cote d'Ivoire and the
U.S.


28. OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS: OPIC
insures several U.S. investments in Cote d'Ivoire although
the overall exposure is relatively small. The African Project
Development Facility (APDF) and the African Investment
Program of the International Finance Corporation (IFC) may
assist investors. Since 1999, OPIC has not issued any new
investment insurance policies in Cote d'Ivoire. Since 2003,
OPIC has withdrawn its underwriting agreement for Cote
d,Ivoire. Cote d'Ivoire is a member of the Multilateral
Investment Guarantee Agency (MIGA).


29. LABOR: The Constitution and the Labor Code grant all
citizens, except members of the police and military, the
right to form or join unions, and workers exercise these
rights. Registration of a new union takes three months.
Despite these protections, only a small percentage of the
work force is actually organized, and most laborers work in
the informal sector (i.e. small farms, small roadside stands,
and urban workshops). Anti-union discrimination is
prohibited. There have not been reports of anti-union
discrimination, and as a consequence there have been no known
prosecutions or convictions under this law. Unions were free
to join international bodies, and the General Workers Union
of Cote d'Ivoire (UGTCI) was affiliated with the
International Confederation of Free Trade Unions. The
Constitution additionally provides for collective bargaining,
and the Labor Code grants all citizens, except members of the
police and military services, the right to bargain
collectively. Collective bargaining agreements were in effect
in many major business enterprises and sectors of the civil
service. In most cases in which wages were not established in
direct negotiations between unions and employers, the
Ministry of Employment and Civil Service established salaries
by job categories. The Constitution and statutes provide for
the right to strike, and the Government generally protects
this right. However, the Labor Code requires a protracted
series of negotiations and a six-day notification period
before a strike may take place, making legal strikes
difficult to organize.


30. On February 19, 2004, the Minister of Employment and
Labor and the Minister of Economy and Finance signed a decree
aimed at promoting national employment. This decree favors
the employment of Ivoirians in private enterprises. The
decree states that any position to be filled must be
advertised for two months. If after two months no qualified
Ivoirian is found, the employer is allowed to recruit a
foreigner, provided that he informs the Administration of his
plan for recruiting an Ivoirian to fill the position in the
next two years. The foreign employee must be given a labor

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contract and must have a visa that costs the equivalent of a
month's salary each year. Representatives of the West African
Economic and Monetary Union harshly criticized the decree and
claimed that it violated Article 91 of the West African
Economic and Monetary Union Treaty, which permits the free
movement of persons for employment within the union. In
response to the criticism, the Minister released a statement
to the press indicating that the decree was a guideline, not
an obligation, and that it was not meant to discriminate
against West Africans seeking employment in Cote d'Ivoire.


31. FOREIGN-TRADE ZONES/FREE PORTS: There are no free trade
zones in Cote d,Ivoire. In August 2004, the Ivoirian
government adopted a plan to create free trade zones for
information technology and for biotechnology. This project is
dormant. Another free trade zone project, which was planned
for the port of San Pedro, also remains dormant. Bonded
warehouses do exist, and bonded zones within factories are
allowed. High port costs and maritime freight rates have
inhibited the development of in-bond manufacturing or
processing, and there are consequently no general foreign
trade zones.


32. FOREIGN DIRECT INVESTMENT STATISTICS: Foreign Direct
Investment inflow by Sector, 2006 (USD)

Sectors Investment Percentage

Food 20,754,610 13.09%
Mechanic, Iron 0 0.00%
& Steel Industry 1,112,183 0.70%
Health 2,444,917 1.54%
Tourism & Hotel 356,380 0.22%
Communication 117,843 0.07%
Agriculture 16,316 0.01%
Telecommunication 94,889,023 59.85%
Textile 18,147 0.01%
Service 2,257,452 1.42%
Training 302,405 0.19%
Plastics 2,389,454 1.51%
Chemical 1,383,685 0.87%
Wood 33,013 0.02%
Transport 8,450,418 5.33%
Mining 3,718,024 2.34%
Oil & Gas 19,722,242 12.44%
Glass 206,061 0.13%
Cosmetics 380,917 0.24%
Total 158,553,090 100.00%



Source: Ivoirian Investment Promotion Authority (CEPICI).
Average exchange rate CFAF 500 per one USD.
Foreign Direct Investment inflow by Country of Origin, 2006
(USD)
Countries Investment Percentage
France 4,312,401 3.35%
Netherlands 21,209,452 16.46%
Great Britain 186,413 0.14%
Lebanon* 1,211,232 0.94%
China 196,391 0.15%
India 522,521 0.41%
U.S.A 2,230,814 1.73%
Panama 4,017,078 3.12%
British Islands 29,208 0.02%
Senegal 242,107 0.19%
Togo 94,528,018 73.35%
Central African Republic 73,326 0.06%
Algeria 110,000 0.09%
Total 128,868,961 100.00%

Source: CEPICI. Table does not represent all the flow
investments by origin.
Average exchange rate CFAF 500 per one USD.
*CEPCI does not include investment from resident Lebanese in
FDI figures
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